Buying by foreign funds lifts most Asian currencies

India’s rupee and South Korea’s won led gains in Asian currencies this week, as foreign funds increased holdings of emerging-market assets amid speculation global central banks would ease monetary policy to spur growth.

The New Taiwan dollar was little changed this week at NT$29.990 against its US counterpart, from NT$30.002 the previous week. The greenback rose against the NT dollar on Friday to close at the day’s high of NT$29.990 as the latter moved lower in line with its regional counterparts amid fresh concerns over the global demand, dealers said.

Fears over the world’s economic fundamentals resurfaced after China, the world’s second-largest economy, reported worse-than-expected export growth for last month, they said.

China’s exports increased 1 percent last month, less than the median estimate of economists in a Bloomberg survey for an 8 percent gain and June’s 11.3 percent pace, official data showed on Friday. However, inflation, at 1.8 percent last month, was the least since January 2010, China reported on Thursday.

“Asian currencies continue to gain ground against the dollar, pricing in a higher probability that the [US] Federal Reserve and ECB will satisfy expectations for further significant monetary easing,” Sacha Tihanyi, a Hong Kong-based senior currency strategist at Scotiabank said on Friday. “Slower inflation definitely does add to speculation of easing in China.”

The rupee strengthened 0.8 percent this week to 55.285 per dollar in Mumbai, while the won rose 0.4 percent to 1,130.45, according to data compiled by Bloomberg.

The Bloomberg-JPMorgan Asia Dollar Index touched 115.73 on Thursday, the highest level since May 15, and was little changed from a week earlier. Global funds pumped more than US$4 billion into stocks in Taiwan, South Korea, Thailand and Indonesia in the first four days of this week, exchange data show.

Emerging-market debt funds attracted inflows of US$720 million in the week that ended on Thursday, Morgan Stanley said in a report, citing data from US-based research firm EPFR Global.